Kenny G plays the stock market

Grammy Award-winning jazz musician finds succour in stockpicking in the face of dwindling album sales


Reuters September 18, 2014

NEW YORK:


Kenny G, who has earned big bucks for his stint as a jazz musician, wakes up every morning to Starbucks... but not to drink coffee. Instead, the man whose real name is Kenny Gorelick, keeps tabs on the company’s stock price.


In fact, the saxophonist, who once played at former US president Bill Clinton’s inaugural ball, was one of the first investors in the Seattle-based chain. He was introduced to Starbucks chief Howard Schultz through an uncle before the company went public, and soon bought a stake. Shares are up more than 12,000 per cent since beginning public trade.



That success helped spark a stockpicking habit that consumes his attention as his music-earning potential is slowly being eaten away by online piracy and digital music, which pays less than physical album sales.

The Grammy Award-winning artiste spends his mornings in front of his computer screen, trading blocs of shares of the companies listed on his portfolio. Over the last decade, he has earned about as much money from stock trading as from music. As far as stock performance goes, “I have a good batting average but I’m definitely not perfect,” he said.

The musician topped the contemporary jazz sales charts for several years running in the 1990s and his 2010 album cracked jazz’s top 10. “You have your one per cent of Beyoncé and U2, who are playing stadiums and are going to make tonnes of money,” he commented. “I’m going to put myself in the normal category of a music person who has been successful. Most people in the music business don’t make as much money as we used to.”

Kenny has been more fortunate than other musicians when it comes to the income he’s lost to streaming and digital downloads. His 2010 album titled Heart and Soul sold nearly 12,000 copies in its first week, with an unusually high 86 per cent of sales coming in higher-priced compact discs, according to figures from Nielsen SoundScan, which tracks music purchases. His next solo album is due later this year.

When stockpicking, he asks people he considers smart about developments in their respective fields. If he comes across a company that looks promising, he watches it for a while, reading coverage of the companies and doing other research before taking the plunge. One of his recent wins was a stake in Potash Corp of Saskatchewan Inc, one of the world’s largest fertiliser exporters.

But as is the case in stock market investments, it has not always been smooth sailing for the legendary musician. After being recommended by a friend, he bought in a stake in the biotech company Dendreon Corp and began purchasing shares at around $35 in 2011. Things did not go to plan and he had to sell them for less than $5 a share.

Kenny still has “a fair amount” of his original shares in Starbucks Corp and watches the stock price every day. Yet, he tries to keep himself from getting caught up in every change of the ticker. “I can get emotional in my music, but try to make more sense when it comes to trading,” he said. 

Published in The Express Tribune, September 19th, 2014.

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